2019 proved to be an important year for the banking industry. Not only this industry has seen huge leaps but also emerging banking sectors that shape a new economy. Changes in technology, demographics and the environment leave the banking industry needing to respond to with better business models.
What appeared to be another digital product proved to be the next big thing in banking. Yes, that would be digital banking, a sector that made significant progress in the last few years with new highs reached during 2019. The shift to digitally-enabled services, products, and companies is already impacting the world, and it’s only accelerating.
Low rates, new regulation, and financial technology – the three characteristics of the industry in the past year! FinTech, the new digital branch of banking, managed to remove friction and redesign customer journeys. The newly proposed models had the client at the centre and offered a personalised experience for individuals and entities with lower costs and swifter transactions.
This meant that regulators needed to adapt to new ways as technology breaks down barriers. With FinTech, banking entered a new era of global regulatory divergence. National boundaries are being pushed to an international network where jurisdictions overlap, and so are laws. Several central banks around the world have taken steps to tackle this industry’s quick spread.
Payments sector continued to be a stable contributor to the banking industry’s growth. Banks have had the same protocols and systems for the past decades, which educated the population into thinking financial services are expensive and not the fastest. But tech evolved, and the infrastructure created a more sophisticated client expecting bespoke, value-added services with seamless connectivity and increased security.
What Fintech industry managed to master was automating existing processes and placing the customer at the centre of the operations. This unfolded new opportunities not just for banking but for the tech industry as well. Empowering clients to serve themselves was and is the motto of neo banks and providers. As banks try to ramp up for modernisation, the process is not an easy one as trying to catch up on technology, and new business models require a different mindset from C-levels.